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Malaysian Prime Minister Najib Razak arrives to attend an investment event in the bio-tech industry at his office in the administrative capital Putrajaya on August 12, 2011. (Image credit: AFP/Getty Images via @daylife)

Malaysia’s ruling party came close to losing an election Sunday because of its economic record. It posted one of Asia’s largest budget shortfalls last year and has been criticized for over-dependence on commodities. But after sweating out street protests and record strength opposition at the polls, Prime Minister Najib Razak’s party held a 60% majority in parliament.

Sunday’s win gives the long-reigning Barisan Nasional a new mandate to continue Najib’s 3-year effort to privatize as many as 33 state firms, an unusual approach toward healing the economy while attracting overseas investors.

“He will most likely continue the government's privatization drive, and possibly with greater force as he would have the mandate to back him, and (he) would have just nearly survived an election so will need to do something quite different,” says Liam Hanlon, political analyst at Cascade Asia Advisors, a research firm focused on Southeast Asia. “He has made no indications of changing course.”

The 28.3 million-population country started divesting its government-linked companies in 2010. Divestment was designed to lead Malaysia to become a high-income nation within a decade, the government has said. The following year, officials identified the 33 firms. Of those, 21 have been slated for outright sale, seven for public listing and five for “pare-downs,” the prime minister’s Performance Management & Delivery Unit said for this blog.

Eleven companies were divested in 2011 and four last year as divestment “continued to gather pace,” the unit best known by its acronym PEMANDU said. Privatization to date has led to the huge IPOs of two enterprises: Felda Global Ventures Holdings Bhd and Integrated Healthcare Holdings Bhd.

It’s not clear what the opposition Pakatan Rakyat would have done with the divestment drive. An Asian diplomat close to Malaysia said the opposition would have kept privatizing had it won a majority on Sunday. But others point to comments by opposition leader Anwar Ibrahim that much of the program would be reviewed.

“The Malaysian opposition party has stated that should they come to power, there will be a review of all tariff-linked agreements, especially those that concern national interest such as power, gas, water etc.,” says Jalil Rasheed, Singapore-based investment director with . He expected the proposed listing of state investment corporation 1Malaysian Development Bhd’s power assets would be the first target.

Anwar has not conceded election defeat, and there is also question about how much further Najib can proceed with privatization on such a slim legislative majority.

But investors have taken those doubts in stride. Malaysia's stocks and currency prices rose firmly on Monday, in sync with much of 2012 when listings of government-linked companies led the country’s equity market to “capture the spotlight amid uncertainties in the global economy and markets,” PEMANDU says.

The Bursa Malaysia’s market capitalization grew by 31.2% from August 2010 to the end of last year, the government unit adds. It says foreign investors were net buyers as of December, as well. “We can expect the pace of privatizations to accelerate,” says Wai Ho Leong, regional economist with Capital in Singapore. “This would stoke investments, and sentiment on equities and the currency market.”